Conversion of credit union into mutual savings bank, mutual co-operative bank, mutual federal savings bank or mutual federal savings and loans association
M.G.L. c. 171, § 80A
in effectc. 171, § 80A. Conversion of credit union into mutual savings bank, mutual co-operative bank, mutual federal savings bank or mutual federal savings and loans association
Section 80A. (a) A credit union subject to this section may convert into a mutual savings bank governed by chapter 168, a mutual co-operative bank governed by chapter 170, a mutual federal savings bank or a mutual federal savings and loans association which exist under authority of the United States. The conversion shall comply with all applicable federal laws and regulations. A credit union insured by the Massachusetts Credit Union Share Insurance Corporation shall file notification of its intent to convert with said corporation at least 90 days before the date of the proposed special meeting of the members of the credit union. No credit union may convert pursuant to this section so long as any financial assistance provided by said corporation to such credit union remains unpaid or has not been compromised or settled. Any such repayment, compromise or settlement shall be approved by the commissioner.
(b) A credit union shall file with the commissioner, at the same time, notices, disclosures and communications required by or sent to the National Credit Union Administration or a regional director. The commissioner may require changes and additions to notice, disclosure or communication, except as required by federal law or regulation.
(c) A credit union that is adequately capitalized and has received at least a satisfactory rating in its most recent examination for compliance with the Community Reinvestment Act may submit a plan of conversion approved by a 2/3 vote of the entire board of directors to the commissioner. Unless waived by the commissioner, the plan shall include but not be limited to:
(1) a 3 year business plan for the appropriate chartered bank which shall include pro forma financial statements for the mutual bank;
(2) a commitment by the converting credit union that it will not convert to a stock form before the expiration of 1 year of the effective date of the conversion to a mutual bank charter;
(3) an estimated budget for conversion expenses;
(4) financial statements for the most recently completed quarter;
(5) if applicable, the procedures and timing for termination of excess deposit insurance from the Massachusetts Credit Union Share Insurance Corporation; and
(6) other relevant information that the commissioner may reasonably require.
(d) Included with the plan shall be an information statement to be sent to members which shall fully and fairly disclose all significant terms and steps to be taken for the conversion and shall include but not be limited to:
(1) a statement as to why the board is considering the conversion;
(2) a statement of the major positive and negative business effects of the proposed conversion;
(3) the impact on the member's financial and other interests in the credit union;
(4) a disclosure that the conversion from a credit union to a mutual bank could lead to a member losing ownership interest in the credit union if the mutual bank subsequently converts to a stock institution and the member does not become a stockholder; and
(5) a disclosure of any conversion related economic benefit a director or senior management official may receive including receipt of or an increase in compensation and an explanation of any foreseeable stock related benefits associated with a subsequent conversion to a stock institution; the explanation of stock related benefits shall include a comparison of the opportunities to acquire stock that are available to officials and employees, with those opportunities available to the general membership.
(e) A converting credit union shall file with the commissioner a plan of conversion and an information statement at least 120 days before the date of the proposed special meeting of the members. The commissioner may require reasonable changes to the plan of conversion and information statement. The commissioner may also require any equitable disclosure he determines applicable to the proposed conversion to a mutual bank transaction. The commissioner may specify the form, type and other material aspects of the plan of conversion and information statement to be sent to members, except to the extent that it does not conflict with federal law or regulation.
(f) The commissioner shall review the contents of the plan before the credit union board presents the conversion plan to the members for a vote. The commissioner shall authorize the distribution of the conversion plan and information statement only if the commissioner is satisfied of all of the following:
(1) the plan discloses to the members information concerning the advantages and disadvantages of the proposed conversion;
(2) the information statement discloses the impact on the member's financial and other interests in the credit union; and
(3) the conversion would not be made to circumvent a pending supervisory action that is initiated by the commissioner or other regulatory agency because of a concern over the safety and soundness of the credit union.
(g) The commissioner shall render a decision within 30 days from the date of the filing of the plan or any amendment thereof. Upon authorization by the commissioner of the distribution of the contents of the conversion plan and information statement, the credit union shall call a special meeting of the members to vote on the conversion plan. At least 30 days before the special meeting, the credit union shall mail to each member a notice of the special meeting, the conversion plan and information statement.
(h) The plan of conversion shall be approved by a majority vote of those members voting. A member may vote on the proposal to convert in person at the special meeting held on the date set for the vote or by written ballot filed by the member. The vote on the conversion proposal shall be by secret ballot and conducted by an independent entity. The independent entity shall be a company with experience in conducting corporate elections. A director or officer of the credit union, or an immediate family member of a director or officer, shall not have an ownership interest in, or be employed by, the entity.
(i) A credit union or an officer or director thereof shall not directly or indirectly give or offer or provide a chance to win a lottery or anything of substantial value, as determined by the commissioner, to the membership or a member of the credit union for an action related to the conversion to a mutual bank or as an inducement to vote on the plan of conversion.
(j) The provisions on notice to members and voting procedures in this section shall govern the process for converting to a mutual bank notwithstanding other provisions of this chapter or a by-law of the converting credit union to the contrary.
(k) Certified copies of the results of the board and membership meetings of the credit union shall be filed with the commissioner. The credit union shall also certify that the information statement, plan, and other written materials provided to members were identical to those materials considered satisfactory by the commissioner.
(l) If the commissioner disapproves of the methods by which the membership vote was taken or the procedures applicable to the vote, the commissioner may direct that a new vote be taken. If the commissioner does not disapprove of the methods by which the membership vote was taken within 10 days after the notification is given, the vote shall be considered approved.
(m) If the conversion to a mutual savings bank or a mutual co-operative bank is approved by the members, and the commissioner receives notification from the converting credit union that approvals required under state and federal law and regulations, including approvals needed for deposit insurance by the Federal Deposit Insurance Corporation, have been obtained and that any waiting period prescribed by federal law has expired or it will become a member of the Depositors Insurance Fund and of the Deposit Insurance Fund thereof and has made all applicable payments thereto as determined by the commissioner, a certificate to transact business shall be issued by the commissioner as applicable. A conversion to a state-chartered savings bank or a state-chartered co-operative bank under this section shall not be consummated until arrangements satisfactory to the Depositors Insurance Fund have been made and notice thereof has been received by the commissioner. After receipt of the certificate to transact business, the converting credit union shall promptly file the certificate and its articles of organization with the secretary of state. Upon the filing, the charter of the converting credit union shall automatically cease and the converting credit union shall cease to be a credit union and shall become a mutual savings bank or a mutual co-operative bank. Upon the conversion, the converted mutual bank shall possess all of the rights, privileges and powers granted to it by its articles of organization and by the laws applicable to the type of mutual bank charter into which it converted, and all of the assets and business of the converting credit union shall be transferred to and vested in it without any deed or instrument of conveyance; but the converting credit union may execute a deed or instrument of conveyance as is convenient to confirm the transfer. The converted mutual bank shall be subject to all of the duties, relations, obligations and liabilities of the converting credit union, whether as debtor, depository or otherwise, and shall be liable to pay and discharge the debts and liabilities, to perform all the duties in the same manner and to the same extent as if the converted mutual bank had itself incurred the obligation or liability or assumed the duty or relation. Rights of credits of the converting credit union and liens upon the property of such credit union shall be preserved unimpaired and the converted mutual bank shall be entitled to receive, accept, collect, hold and enjoy all gifts, bequests, devises, conveyances and appointments in favor of or in the name of the converting credit union and whether made or created to take effect before or after the conversion.
(n) If the conversion to a mutual federal savings bank or a mutual federal savings and loan association is approved by the members the converting credit union shall provide notification to the commissioner that all approvals under state and federal law and regulations including approvals needed for deposit insurance by the Federal Deposit Insurance Corporation have been obtained and that any waiting period prescribed by federal law has expired and shall provide a certified copy of the approval of the federal mutual charter by the Office of Thrift Supervision or any successor agency thereto. Upon acceptance of the federal charter, the converting credit union's charter from the commonwealth shall cease to exist.
(o) A person who willfully violates the disclosure provisions of this section knowing the disclosure made to be false or misleading in a material respect shall upon conviction be fined not more than $5,000 or imprisoned not more than 3 years, or both.
Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter171/Section80AFetched: 10/20/2026